A surge in options trading activity on the altcoin-focused derivatives exchange PowerTrade suggests that traders are expecting bullish momentum to persist in the short term for APE (Ape ecosystem’s governance and utility token). The recent strong rally in APE, which has doubled in value to $1.50 since the weekend, is likely driving this optimism.
APE Options Activity on PowerTrade
According to data from PowerTrade, open interest (the number of active options contracts) surged by over 800% to 263,000 ($394.5K) in one day, with call options accounting for over 80% of the tally. This significant increase in activity is a clear indication that traders are taking a bullish stance on APE.
What are Call Options?
Call options or derivatives offer an asymmetric upside potential, meaning they allow buyers to profit from increases in the underlying asset’s value without being exposed to losses if the price drops. In this case, traders buying call options are implicitly bullish on APE, expecting its value to rise further.
APE Options Strike Prices
Most of the activity is concentrated on the Oct. 22 and Oct. 25 expiry contracts, with traders buying higher strike out-of-the-money (OTM) calls at strikes as high as $2.2 or nearly 50% higher than APE’s going market price. This suggests that traders are anticipating a significant increase in APE’s value.
APE Market Capitalization and Trading Volume
It is worth noting that the activity in APE options is noteworthy, considering the token has a relatively small market capitalization of just $1 billion. However, this is not unusual for altcoins, which often exhibit growing sophistication in their trading volumes and open interest.
Comparison to BTC and ETH Options Trading
In comparison, the open interest and volume in APE options are significantly lower than those seen in BTC and ETH options contracts listed on Deribit. This may be due to the smaller market capitalization of APE or the fact that it is still a relatively new token.
What’s Driving the Bullish Expectations?
The bullish expectations likely stem from two key events:
- Apechain mainnet launch: The launch of the Apechain mainnet has been expected for some time, and its successful deployment could potentially drive up the value of APE.
- LayerZero’s integration: LayerZero is a popular interoperability protocol that enables seamless communication between different blockchain networks. Its integration with APE could increase the token’s adoption and utility, driving up demand and value.
PowerTrade: A Leading CEX and DEX Venue for Altcoin Options
PowerTrade offers European-styled USD-settled options with one contract representing 1 APE as underlying. The exchange debuted the request-for-quote (RFQ) model for the options market in late 2022, allowing traders to execute multi-legged strategies as a single instrument.
Record Trading Volume on PowerTrade
On Monday, PowerTrade registered a record trading volume of $50 million in options tied to 44 altcoins. The exchange plans to offer options tied to several other altcoins, including EIGEN, APT, ARK, and PYTH.
Conclusion
The surge in APE options trading on PowerTrade is a clear indication that traders are expecting bullish momentum to persist in the short term. The recent strong rally in APE, coupled with the launch of the Apechain mainnet and LayerZero’s integration, has likely driven this optimism. As the altcoin space continues to grow and mature, it will be interesting to see how trading volumes and open interest evolve for tokens like APE.
